Problem 21-8 Cash flows from operating activities (direct method and indirect method)-deferred income tax liability and amortization of bond discount (LO21-3, 21-4] Portions of the financial statements for Parnell Company are provided below. $ 890 11 $ 901 PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in millions) Revenues and gains: Sales Gain on sale of buildings Expenses and losses: Cost of goods sold Salaries Insurance Depreciation Interest expense (for bond) Loss on sale of machinery Income before tax Income tax expense Net income $ 345 129 53 59 13 731 170 85 $ 85 PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) Year 2018 2017 Cash $ 152 $ 91 Accounts receivable 342 Inventory 312 443 Prepaid insurance 57 106 Accounts payable 228 108 Salaries payable 120 84 Deferred tax liability 78 61 Bond discount 181 207 Change $ 61 135 (131) (49) 120 36 218 17 (37) Complete this question by entering your answers in the Required 1 Required 2 Prepare the cash flows from operating activities section of the s method. (Enter your answers in millions (i.e., 5,000,000 should with a minus sign.) 85 132 17 X (11) Cash Flows from Operating Activities: Net income Adjustments for noncash effects: Depreciation expense Increase in bond discount Increase in deferred tax liability Gain on sale of buildings Changes in operating assets and liabilities: Loss on sale of machinery Increase in accounts receivable Decrease in inventory Decrease in prepaid insurance Increase in accounts payable Increase in salaries payable 13 X XX (135) 131 49 120 36 > X Net cash flows from operating activities $ 474